AbstractThe international
remittance is one of the important sources of foreign exchange
earnings in the country. Recently, Pakistan received over $4 billion
as foreign remittances in 2006. The flows of funds through foreign
remittances served as a cushion for balance of payment and foreign
reserves. The economic determinants of international workers’
remittances and migration in Pakistan were investigated in this
research study. The time series data were used to identify the
economic determinants of the international remittances and migration
in Pakistan for the year of 1973 through 2005. The stationary
properties of each time series were investigated and found
integrated of order one. The variables of remittances and migration
models were established as co-integrated.
The real remittances in Pakistan were found positively related with
real GDP, real Growth rate and unemployment rate and were negatively
related with real wage rate, literacy rate and spread rate of banks
in Pakistan. The migration from Pakistan was found positively
related with real remittances, inflation and unemployment rate and
was negatively related with real wage rate in the country. Based on
research results, it seems imperative to introduce financial
innovations and create friendly environment for migrant workers to
invest in the country. The widening gap of saving-investment can
also be bridged through providing incentives on the bank rate and
saving schemes.